Exploring and keeping readers up to date with the growing economic and political ties between China and South America. Including all the good stuff: Commodities, Energy, International Finance, South-South Cooperation, Microfinance and more

Thursday, April 16, 2009

Yes! The US has elected an articulate, charismatic leader with integrity. Something we lacked for the past 8 years when we had the guy in office who recently had a shoe thrown at him while in Iraq.

However, not all is fine and dandy in the Good old US of A. The United States has Obama fever but that does not mean the conservatives and the right are sitting quietly the side lines as Obama does what he pleases.

Señor Karl Rove, remember him from the whole Valerie Plane scandal a few years back? He hit the presses this weekend with a OP-ED from the Wall Street Journal you can read by clicking here.

The upcoming World's Fair should offer the chance to build a showpiece U.S. pavilion. But thanks to behind-the-scenes maneuverings and State Department incompetence, we may end up with a Chinese-funded pavilion—or no pavilion at all.

Shanghai Expo 2010, Inc.'s proposed design

“National pavilions are supposed to represent who we are as a nation and a culture,” explains Barry Howard, a California designer who has been involved with Expos and pavilions for over four decades. “They tell a story of whom we’ve become and who we’ll be.” So far, the story of the U.S. pavilion for the 2010 World Expo has not been flattering for the United States. And on April 15—the deadline day for the U.S. to sign an Expo participation agreement—it may become an outright embarrassment.

If Expo 2010 were being held anywhere else – say, Amsterdam – there wouldn’t be any pressing need for a U.S presence. But just as the 1893 Chicago World’s Fair (better known as the World Columbian Exposition) signaled the ascendance of the U.S. as a major industrial power, and the 1964 New York World’s Fair suggested U.S. technological superiority, 2010 seems primed to represent the rise of Chinese economic and political power in the 21st century.

Reserved land for the US Pavilion...

A no-show by the U.S. would convey as much about America’s diminished place in this new geopolitical order as does its ongoing run-up of Chinese-owned debt. The Chinese government, meanwhile, has indicated that a no-show might be taken as a snub. Though few Americans are paying attention now, come May 1, 2010, when the expo opens, surely many would wonder why the U.S. is not represented among the gleaming, architecturally significant pavilions on the Shanghai riverbanks.Click here to access Adam Miller's article in its entirety from The Altantic

United States President Barack Obama heads to Mexico Thursday and then continues on to Trinidad and Tobago for the fifth Summit of the Americas. Security concerns along the US-Mexico border are expected to top Mr. Obama’s discussions with Mexican President Felipe Calderon, while the summit provides an opportunity to reinvigorate the US hemispheric ties and forge a regional response to the global economic downturn, according to a Voice of America report.

Lima, Apr. 14 (ANDINA).- Peru's economy might have grown 3.1 percent in the first quarter, according to the Lider index estimates, which shows economic trends in the short term, stated today the Ministry of Economy and Finances (MEF).

Argentine and Paraguayan government officials have agreed to establish a bilateral commission to study the technical feasibility of selling power to Chile.

The commission will have 180 days to carry out the study, Paraguay's presidential website reported.

Paraguay would receive roughly US$140mn/y from the energy sales, according to Carlos Cardozo, the landlocked country's director of the EBY joint venture, which administers the Yacyretá hydroelectric dam on the Argentine-Paraguayan border.

At first glance, this book may seem uninteresting. After all, nobody reads manuals.

But upon closer inspection, you realize that this is a Chinese-Spanish language manual for running a supermarket. Open it and you find the distinctive Rioplatense Spanish of Argentina, with useful phrases such as “Gracias a vos: 谢谢你” (thank you) or “Yo tampoco tengo monedas: 我也没有硬币” (I don’t have coins either).

One finer detail of the book is that it is written in simplified Chinese, addressed to a mainland audience. Yet the name in traditional Chinese at the bottom of the cover indicates something about the author — he is Taiwanese.

The evolution of the Chinese-run supermarkets provides an interesting snapshot of the changing Chinese presence in Buenos Aires. While most Chinese-run supermarkets were originally opened by immigrants from Taiwan, there is a shift towards these businesses being sold to and run by mainland Chinese. This book is further evidence of that trend.

“Foreign direct investment will continue to drop in the coming months as multinationals face a continued credit crunch and a deeper world recession,” said Lu Zhengwei, a Shanghai- based economists at Industrial Bank Co. “Investors will remain cautious until the world economy and consumer demand recover.”

China’s government said last month it will simplify approvals for overseas capital entering the nation by giving local governments more authority to approve such spending.

In response the Chinese government is planning:

To continue providing liquidity to ensure loan growth in order to keep demand flowing (click here to read more about China's surging loans)

Rural-sales programs through the provision of billion yuan ($2.9 billion) in subsidies for rural consumers buying electronics, home appliances, cell phones and other commodities. The government hopes this will allow the economy to tap into a very unexploited consumer market, numbering hundreds of millions of people.

If China could get the rural economy going it would be a great move for macro economy in the long term. When I was studying rural economics a continuous theme presented by the government was their hope the rural areas of China would develop in response to migrants sending money home and bringing a sophisticated mentality back when they visit or move home.China is also counting on its rural population of 350-600 million to enter the mainstream economy.

Buy goods and services. Pay taxes to build their own new roads and schools. Rent empty apartments. Save their money in Chinese banks. Buy Chinese stocks. Basically to help in increasing China's GDP and overall level of development..

The investment fund will promote infrastructure development linking China with the 10 members of the Association of Southeast Asian Nations, while the loans will be offered over three to five years, according to a statement on the Foreign Ministry Web site today citing an interview with Foreign Minister Yang Jiechi.

The measures from the world’s third-largest economy, and one of the few forecast to maintain growth this year, may help speed recovery from the global financial crisis and cement China’s leadership in the region. The nation has already signed currency swap agreements with Indonesia, South Korea, Hong Kong and Malaysia this year to help ease foreign-exchange shortages and aid bilateral trade and investment.

“China is going to take the opportunity of this crisis to further establish itself in Asia,” said Huang Jing, a visiting professor at the National University of Singapore’s Lee Kuan Yew School of Public Policy. “All this will have a huge political and diplomatic impact in the region, in addition to the economic impact.”

Ecuador President Rafael Correa said that his country’s economic growth in 2008, which according to the latest estimates was 6.5%, was among Latin America’s highest despite the international financial crisis -- and despite defaulting on a portion of the nation's international debt.

“The latest estimates from the Banco Central say that total growth in 2008 was 6.5 percent – that’s the highest in a long time,” Correa said on his customary Saturday radio and television program.

He also said that if the oil sector were removed from the calculations, the Ecuadorian economy last year grew 7.95 percent, which would represent the highest surge since the 1970s when Ecuador enjoyed an “oil boom.”Click here to access this article in its entirety

Investment in Chilean copper and gold projects is expected to total over $30 billion.

Chile is the world’s No. 1 producer and exporter of copper and each 1-cent increase in the annual median price of copper represents an additional $40 million for the treasury of the Andean nation. The median price per pound so far this year is $1.59, compared with $3.15 a pound in 2008.Click here to access this article in its entirety from MercroPress

Shen Mingga, Chief economist of Caijing shares his thoughts on the Chinese economy and what to make of economic data from March.

Is China's stimulus working? Shen Mingga seems to think so, at least in certain sectors. There aren't many truly incredible China focused finance sites. Caijing stands on top with a handful of good ones, excluding the big names like Reuters or Bloomberg.